Quote from @Kmsuea Abdei: This used to be a state requirement, some states required it, and some brokerages required it.

Ask your lender about their recast requirements (payment amount and frequency).

Real estate investing requires a good deal of research, so build your arsenal and over time you'll be an old pro. 

"I think we all agree that being fully transparent is beneficial to real estate investing"....Let's try LEGALLY REQUIRED. 

However, you can likely sell all the properties in the required timeline to do the 1031k, although that will take some effort/cooperation between multiple buyers/brokers, considering the separate markets.  

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

.- The 203(k) will allow you to bid on properties that need repairs that won't qualify for a traditional mortgage => less competition => better purchase price.You will need to find a great local contractor you can trust to supply the required bids to qualify for the 203(k).- After closing, you can do some of the work yourself to save money, but the program doesn't allow you to pay yourself.You will want to buy a Class B property, maybe Class C+, in an area that seems to be improving.

I could be wrong but I thought I saw that Sacramento requires primary residence for the owner for STR.Do you live in Sacramento or nearby ?

I am also looking for tax optimization as the business will require cash reserves and is a high risk business from a liability perspective.

Helps with your debt to income, better opportunities at cash flow, and typically requires less down to purchase.In regards to challenges, I usually build in an extra 10-15% to deal with things that I can't see behind the walls, including dry rot, electrical or plumbing issues, etc.